Adolescents' School Enrollment and Employment:Effect of State Welfare Policies

Lingxin Hao, Nan M. Astone and Andrew Cherlin

JCPR Working Papers from Northwestern University/University of Chicago Joint Center for Poverty Research

Abstract: This study hypothesizes that stringent state welfare policies may promote enrollment and reduce employment through four mechanisms taking place in the larger society, the local labor market and the family, particularly for adolescents from low-income families. We conduct a rigorous and robust analysis using a dynamic model and separating out the welfare policies from non-welfare state policies, youth-specific state labor market conditions, and unobserved state characteristics and period effects. Using longitudinal data from the NLSY97, we have tested the welfare policy effects over a period across welfare waivers and welfare reform (1994-1999) for adolescents aged 14-18. We find that welfare reform may change the behavior of teenage students by encouraging full engagement in schooling and reducing employment while in school. If focusing entirely on schooling is the best way for low-income youth to build human capital, these possible effects of welfare reform could be beneficial. However, if low-income youth obtain "soft skills" from a formal job and if "soft skills" turn out to be decisive for low-income youth?s economic future, these welfare policy effects could be harmful. In addition, stringent state welfare policies appear to have a detrimental effect on teenage dropouts from low-income families.

Date: 2001-07-03
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Persistent link: http://EconPapers.repec.org/RePEc:wop:jopovw:232

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